GET FINANCIAL FREEDOM THROUGH BUDGETING

Budgeting is a simple process yet very hard for most of us. Why? We view budgeting as a limitation and control and therefore it comes out as a negative thing. The reality is budgeting actually gives you lots of freedom.

Even in life when there are no rules then there is chaos. Imagine you driving on a busy highway and there are no rules anyone can drive anywhere and in any direction…You figure the rest out.

Essentially budgets if well done give us the independence to enjoy life. Imagine that. Imagine a situation where you don’t have to worry that the month is longer than the money. With a budget you are sure you will get to the next pay check and even have some left to go on holiday. That is called freedom right there.

Easy steps to budgeting

1.       Track each and every of your expenses for a month. Each and every coin. Tracking every expense will open your eyes in knowing where you spend most of your money. It will give you an idea of things you can change.

Just buy a small note book and write down every time you spend money.

2.        Track each of your sources of income for a whole month. Most of us only view salary as the source of income. What about the dividend payments that we get? Some payments are as high as Kes 3000. We don’t budget for this income and in turn we have no idea where the money goes.

3.       Transfer this to an excel sheet for easier monitoring.

4.       Do the actual budgeting. In the budget the expenditure should never be more than the income. Play around with the expenditure items until you are able to fit within the income. It may involve some life style changes but in the end it is worth it. Remember to allocate some money to treat yourself. Feel no guilt about that.

5.       Stick to your budget. It will be hard on month one. In month 1 if you work with 50% of your budget buy yourself a gift. It will take approximately 3 months to get into the routine of the budget so don’t be too hard on yourself.

6.       Continue to track all your expenses

Sample Budget Below

June	Budget	Actual spent	Pending for the month
Tithe	8,000.00		8,000.00
entertainment	4,000.00		4,000.00
Rent	15,000.00	15,000.00	-
Loan	9,000.00		9,000.00
House girl	6,000.00		6,000.00
Savings	3,000.00		3,000.00
elec	2,300.00		2,300.00
water	1,100.00		1,100.00
Self celebration	1,000.00		1,000.00
House food	14,100.00	3,134.00	10,966.00
Garbage	1,000.00		1,000.00
gas	2,500.00		2,500.00
hair	3,000.00		3,000.00
fuel	10,000.00		10,000.00
	80,000.00	18,134.00	61,866.00

Lifestyle changes that can save you some money

1.       Buy vegetables and fruits in the market instead of the supermarket

2.       If you really need to keep your credit card. Use it to buy budgeted items and pay it off in full every month

3.       Shop in bulk

4.       Take advantage of the sales in the supermarket. Buy one get one free really works for your pocket

5.       Cut down on BRAND shopping and do product shopping without compromising on quality. When in the supermarket just check the difference in prices for a particular product. What shocks me is that we will but the most expensive soap yet when it comes to medicine we are comfortable with generics

6.       Carry lunch and breakfast to the office. In the office a sausage cost 40 if you buy a 10 pack it will cost you 200 ie 20 a sausage

With continuous budgeting you have food in your fridge on a daily basis, fuel in your car the week before payday and a paid for holiday from the money you managed to save

Stress Management!

A young lady confidently walked around the room while leading and explaining stress management to an audience with a raised glass of water. Everyone knew she was going to ask the ultimate question, 'half empty or half full?'... She fooled them all... "How heavy is this glass of water?" she inquired with a smile. Answers called out ranged from 8 g to20 g.

She replied, "The absolute weight doesn't matter. It depends on how long I hold it. If I hold it for a minute, that's not a problem. If I hold it for an hour, I'll have an ache in my right arm. If I hold it for a day, you'll have to call an ambulance.

In each case it's the same weight, but the longer I hold it, the heavier it becomes." She continued, "and that's the way it is with stress. If we carry our burdens all the time, sooner or later, as the burden becomes increasingly heavy, we won't be able to carry on."

"As with the glass of water, you have to put it down for a while and rest before holding it again. When we're refreshed, we can carry on with the burden - holding stress longer and better each time practiced.

 So, as early in the evening as you can, put all your burdens down. Don't carry them through the evening and into the night... Pick them up tomorrow.

1 * Accept the fact that some days you're the pigeon, and some days you're the statue!

2 * Always keep your words soft and sweet, just in case you have to eat them.

3 * Always read stuff that will make you look good if you die in the middle of it.

4 * Drive carefully... It's not only cars that can be recalled by their Maker.

5 * If you can't be kind, at least have the decency to be vague.

6 * If you lend someone Kes 1000 and never see that person again, it was probably worth it.

7 * It may be that your sole purpose in life is simply to serve as a warning to others.

8 * Never buy a car you can't push.

9 * Never put both feet in your mouth at the same time, because then you won't have a leg to stand on.

10 * Nobody cares if you can't dance well. Just get up and dance.

11 * Since it's the early worm that gets eaten by the bird, sleep late.

12 * The second mouse gets the cheese.

13 * When everything's coming your way, you're in the wrong lane.

14 * Birthdays are good for you. The more you have, the longer you live.

16 * Some mistakes are too much fun to make only once.

17 * We could learn a lot from crayons. Some are sharp, some are pretty and some are dull. Some have weird names and all are different colors, but they all have to live in the same box.

18 * A truly happy person is one who can enjoy the scenery on a detour.


AND MOST IMPORTANTLY

19 *Save the earth..... It's the only planet with chocolate!*

PS: The article is borrowed. It is inspiring so I thought I would share. Not my own composition.

Abundance Mentality as opposed to a Scarcity Mentality

For most of us we live in a society where we always want more and believe that what we have is not enough to get us to where we want to be in our finances, career and generally life. There is nothing wrong in wanting more; in any case it is a good thing to want more in life. It acts as a driving force to get us to the next step.

What hinders us is the mentality that what we have is not enough to get us to next step. We tell ourselves when I get a salary increment or a bigger job I will buy myself a house or I will go back to school.

Guess what when we get the salary increment which we do every year we have no idea what happens to the money and we set the goals for the following year and the cycle goes on. And of course nothing changes in our lives. (‘Rat race’ Concept as explained by Robert Kiyosaki in his book RICH DAD POOR DAD)

The reason for the lack of growth is that we tend to have a scarcity mentality as opposed to an abundance mentality when it comes to life and especially money and we believe that what we have is not enough or good enough for our dreams and financial purposes.

You know Rome was not built in one day and the same applies to wealth creation. We need to build it over a period of time.

In his book the “The 7 habits of highly effective people” Steve Covey coined the idea of abundance mentality or abundance mindset, a concept in which a person believes there are enough resources and success for themselves and to share with others.

He contrasts it with the scarcity mindset (i.e., destructive and unnecessary competition), which is founded on the idea that, if someone else wins or is successful in a situation, that means you lose; not considering the possibility of all parties winning (in some way or another) in a given situation.

Abundance Mentality	Scarcity Mentality
Peace, Comfort	Fear, anxiety, desperation
There are always new chances and opportunities	You have only got one shot
Positivity, Growth	Utter failure just because you stumbled once

With a scarcity mentality you keep waiting for that opportunity of unspecified amount at an undefined time to come your way. Some people wait all their lives. As opposed to an abundance mentality which allows you to plan, invest and see every opportunity as a means to achieving your financial goal.

How to get rid of a scarcity mentality

1. Focus on what you have and not what you lack. Your thoughts form your words which form your actions which result in your habits, behaviour, culture and we all know how the cycle goes. Whatever you focus on is what you will see in your world.
2. Appreciate what you have
3. Get organized financially
4. Hang out with people who have an abundance mentality. Look for like minded positive people
5. Get rid of the sources of negative vibe in your life. This may mean avoiding some people who always have negative vibe
6. Create win-win situations and collaborate with others especially when it comes to investments
7. Learn from your investment mistakes and move on

When it comes to money there are several healthy habits that can be adopted that can help change ones view of money

1.     Budget what you have and live within your means

2.     Track all your expenses on a daily basis including the Kes 20 you gave the guy on the street.

This seems like a very tedious process but let us look at what it costs not to do it. Assuming you cannot account for Kes 100 in a day, in a 30 day month that adds up to Kes 3000 that you cannot account for, in a year it is Kes 36000. Now imagine what you can do with that Kes 36000……… I hope now you understand why you need to track every penny.

3.     Where possible do bulk shopping as opposed to buying an item when it is over. When you buy in bulk you can save upto Kes 100 per item. (One day do window shopping of the items that you buy monthly and see)

4.     Avoid buying things from the local kiosk. Most of the time we run to the kiosk to do emergency shopping. Guess what Kiosk prices are 20-50 bob more than supermarket.

5.     Get rid of unnecessary expenses

6.     In your budget include rewards. You work hard every month allocate a portion of your salary to spend on yourself on anything that you want. If you allocate the funds you will not feel guilty spending the money. After all why work hard if you cant enjoy yourself. It can be as little as Kes 500.

7.     For those who believe in God. As a way of saying thank you to him for seeing you through the month give tithe, help someone in the society. Anything as an act of worship.

In the end if you work with what you have you will be surprised how much you have and how much you can produce from it.

TAKE A STEP BACK AND CELEBRATE YOURSELF TODAY